Wall Street waffles and see-saws

Wall Street waffled before finishing lower today as oil prices also see-sawed and traders weighed lacklustre earnings from Xerox Corp against a surge in housing prices.

Investors were nervous about oil after crude futures’ rally on Friday. So stocks gave up early gains as oil crept upward; futures finally closed at 59dollars a barrel on the New York Mercantile Exchange, up 35 cents.

Stocks had advanced on news that the median price for existing homes in July was a record 219,000dollars, a gain of 14.7% from the median, or midpoint, prices a year ago. That was the biggest jump in prices since November 1980 and another in a string of reports showing the nation’s economy continues to expand at a healthy pace.

But investors may stay on the sidelines until the Commerce Department releases its eagerly anticipated report on second-quarter gross domestic product numbers Friday, said Ed Peters, chief investment officer at PanAgora Asset Management Inc.

“A directionless market is usually a down market,” Peters said. “Right now, people are waiting instead of buying.”

The Dow Jones industrial average fell 54.70, or 0.51%, to 10,596.48.

Broader stock indicators were slightly lower. The Standard & Poor’s 500 index, which has gained for the last four weeks, fell 4.65, or 0.38%, to 1,229.03, and the Nasdaq composite index fell 13.00, or 0.60% to 2,166.74. The drop sent the Nasdaq back into negative territory for the year.

Bonds fell, with the yield on the 10-year Treasury note rising to 4.25%, up from 4.22% Friday. The US dollar was up against the euro. Gold prices were higher.

BellSouth Corp, the dominant local telephone provider in nine southeastern states, reported a more than 20% drop in second-quarter profit on a slight rise in revenue. The decline beat analysts’ expectations, and the stock rose 9 cents to 26.81 dollars.

But Xerox fell 85 cents to 13.20dollars after the maker of copiers and printers missed Wall Street estimates and gave third-quarter earnings guidance below analysts’ current forecasts. Goldman Sachs Group Inc. downgraded the stock.

Profits at American Express Co. soared 16% in the second quarter, handily beating analysts estimates. Stock in the credit card and travel company fell 1 cent to 54.56dollars.

Wall Street has been lukewarm about second-quarter earnings, although most companies have beaten expectations. This week will see another cascade of reports, including many of the top companies in the S&P 500.

“If anything is going to move the market this week, it’s going to be news on te earnings front, which so far has been favourable,” said Mark S. Jordahl, chief investment officer at US Bancorp Asset Management .

In other company news, Generic drug maker Teva Pharmaceutical Industries Ltd. Rose 7 cents to 31.23dollars after it said it is acquiring rival Ivax Corp. in a cash-and-stock deal worth about 7.4 billion dollars. The price is about a 14% premium to Ivax’s closing price of 22.88dollars on Friday. Ivax rose 2.29dollars to 25.17dollars.

Maytag Corp. said Sunday the 18dollars-per-share, or 1.43 billion dollars, purchase proposal it received from Whirlpool Corp may be a better deal than one offered by a New York investment firm, but a company statement said Maytag remains hesitant to immediately open its books to Whirlpool.

On Friday, Whirlpool increased its bid to acquire Maytag by 1dollar per share. Maytag has signed an agreement to be bought by Triton Acquisition Holding Co., an investment group led by New York-based Ripplewood Holdings. Maytag rose 80 cents to 17dollars and Whirlpool rose 5.50 dollars to 82.68dollars.

Wal-Mart Stores Inc., the world’s biggest retailer, fell 9 cents to 49.45 dollars after the company said it plans to open another 42 stores in China by the end of next year, nearly doubling its presence in the country, a senior company official said Monday.

Declining issues led advancers 6 to 5 on the New York Stock Exchange, where volume came to 1.30 billion shares, down from 1.37 billion Friday.

The Russell 2000 index of smaller companies fell 6.79, or 1%, to 670.99.